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A study in contrast

Print edition : Feb 16, 2002 T+T-

GUJARAT'S cooperative model, better known as the Anand model, is a big success. Maharashtra tried to emulate it, but the effort was unsuccessful. The reasons for the failure were numerous. Some of them are:

* The Anand model of management is based on a professional set-up with no political interference. In Maharashtra, almost 90 per cent of the cooperatives are controlled by politicians.

* Each village in Gujarat has only one cooperative society. In Maharashtra, there could be as many as 10 cooperatives in one village. Unlike in Maharashtra, there are no taluk-level cooperatives in Gujarat. The system followed in Maharashtra raises operational costs.

* The Gujarat Milk Marketing Federation is the sole buyer and seller of all milk produced by the cooperative sector. In Maharashtra, the cooperatives decide to whom they should sell the milk.

* The Gujarat federation is elected by the cooperatives and comprises actual producers. On the other hand, milk producers are not represented in the Maharashtra State Cooperative Milk Federation.

* Market forces dictate the price of milk in the Gujarat Federation and profits are passed on to the milk producer. In Maharashtra, the price is fixed by the government.

* The Gujarat federation has diversified into commercially viable byproducts such as condensed milk, cheese and ice-cream. Moreover, such products have found a prominent place in the market. Maharashtra's surplus milk is processed to make butter and milk powder which, according to the government, is not profitable. n

Source: Government of Maharashtra reports and the Mckinsey report on the dairy industry in India.